Saving for Christmas on a Fixed Income

Christmas can be an expensive time of year. Between travel, gift giving and meals, it’s not difficult to blow your budget and get into debt. If you are on a fixed income, this time of year can be particularly difficult on your finances. Unless you are able to supplement your income another way, you’ll have to make do with what you have and that requires two things: realistic expectations and a plan.

Below is a great list by LILA which outlines practical tips on how to get through the holidays without going into debt.

Realistic Expectations

One of the easiest ways to avoid disappointment during the holiday season is to set reasonable expectations. If you already know you are going to be on a tight budget, take a few minutes to explain that to your little ones, or discuss it with your spouse. Openly acknowledge that while you would like to be able to spend a lot on the holidays, it’s not responsible or even an option.

Readjust your expectations and find things you can do that are enjoyable. You can still celebrate the holidays on very low budget; you just need to have a plan.

Have a plan

When you have to tackle a financial burden, like holiday spending, having a plan of action will not only help you stay focused and save money, it can make sacrificing more fun and even make it possible to get more of what is really important to your family. Here are a few ideas for making a cheap holiday celebration a success:

Cut your gift list

Buying gifts for everyone you know can quickly eat up your budget. Trim down the gifting list to immediate family members and best friends. If you’re on a really tight budget, you may even want to trim it down more by choosing names from a hat and only buying gifts for the person you picked.

Make homemade gifts

Instead of purchasing new gifts for the people on your list, consider making inexpensive gifts. You can use old records to make bowls (heat them in the oven, on top of a glass bowl at 250 degrees for 5 minutes, remove and mold), make personalized CDs, create a photo collage or write a poem and put it in a nice frame.

Offer services

If money is really tight; offer services instead of an actual gift. Walk your neighbor’s dog for a month, cook your husband’s favorite meal or babysit your sister’s kids for a few Friday nights so she can get some free time. These won’t cost you anything but your time and you’ll likely be rewarded with good feelings and a lot of appreciation for the thoughtful gift.

Find free events

There are plenty of ways to get in the festive spirit. You don’t have to pay for concerts and events. Find free community activities like caroling or concerts. Another fun activity: hop in your auto and check out the homes lit up with Christmas decorations.

Pay cash

The last, and perhaps most important tip, is to spend cash when you pay for holiday expenses. Cash keeps you honest. If you are trying to avoid debt, cut up the credit cards and pay for the holidays with money. You’ll be able to track how much you are spending much more easily and studies have shown that people spend less when they use cash because they can actually see the money disappearing.

You can embrace the season to be jolly with less money and more focus on spending time with friends and family.